February 28, 2014

Could Project Ara's Smartphone by Google be a Game Changer?

Earlier this year Google sold off Motorola to Lenovo. What some people didn't know is that Google retained one secret division at Motorola called the Advanced Technology and Projects (ATAP) group that is headed by Regina Dugan, the former director of the U.S. Defense Department's fabled Defense Advanced Research Projects Agency (DARPA) which developed the Internet, satelite navigation and stealth fighters. We covered Regina Dugan in a report earlier this year regarding Motorola's electric Skin Tattoo project. Google's ATAP group introduced a new project back in October 2013 which has only recently come to light. It's Project Ara which is an initiative that aims to develop a free, open hardware platform for creating highly modular smartphones. The platform will include a structural frame that holds smartphone modules of the owner's choice, such as a display, keyboard, extra battery or larger camera. It has the potential of revolutionizing the smartphone as we know it. The question becomes: Will this geeky concept actually turn into the new social chic? We'll know soon enough because it's being targeted for public release next year.

Google Introduces Project Ara

Make no mistake about it, Project Ara could very well reinvent the smartphone by breaking it down into modules that could be assembled and customized in a limitless number of configurations. It has the potential of turning the way that we purchase our phones into an experience more like going to a sushi bar, picking tiny morsels from a massive menu of delights.

While this is a Google project, the fact remains that the idea was actually made public first in September 2013 by Dave Hakkens, an industrial-design student from the Netherlands. He proposed a snap-together smartphone system that he called Phonebloks.

Hakkens was motivated mostly by the ecological implications of a culture that has tech enthusiasts using a smartphone for only a year or two before dumping it and moving onto something newer and shinier. After all, "If you have a bike and you get a flat tire," he reasoned, "you don't throw it away and buy a new bike." His noble, seemingly far-fetched goal was to spark enough interest in Phonebloks that the industry would embrace the concept and make it happen.

Hakkens remembers thinking that "Maybe it'll take us ten or twenty years, but it's not impossible." Below is his video articulating the very idea that Google was supposedly working on at the same time.

Although the back of the unit is geeky, it's nothing that a case wouldn't hide. So as long as the device face is cool, it shouldn't be as geeky as one might think. The photo below shows us that the phone has a rather modern look.

According to Google, the individual backside module will be stay in place using electropermanent magnets.

Ara Phones Not Aimed for Major Markets First

Google isn't saying when it might start marketing Ara phones in the U.S., so this could be a smartphone market for emerging markets at first – though they may test it out State side in niche areas.

It will also take time for industry players who will be making these backside components to get on board. Google will have to make sure in the beginning that there's a variety of suppliers for every major component that consumers will be able to purchase as building blocks, but not too many so as to confuse consumers when choosing their components making up their new phones.

Sold at Google Designed Mobile Kiosks

The fullest expression of the Ara sales experience will happen at mobile kiosks, which Google is designing to fit into industry-standard shipping containers for easy transportation to wherever on Earth they're needed.The company is still figuring out where they'll show up first, though it's likely that phones will be available in one geographic region before any global rollout.

Mixed Appeal

So could Project Ara be a game changer? I think that it could be in emerging markets initially where consumers will be able to buy a WiFi based phone for $50 and then simply add more components as they could afford them.

From a manufacturing standpoint, it's a better business model than trying to manufacture a line of 5 or 10 smartphones trying to appeal to every possible niche in the market. To make money, the modular idea has legs, no doubt about it.

In the bigger picture, it's not likely to appeal to the higher end of the market where Apple's success rests with their top-tier iPhone. Professionals in every field will still want to own the latest in cutting edge technology that's in the coolest form factor.

Many older professionals still remember 007 movies where James Bond had the latest and greatest toys for every mission. Yes, we all love our key toys to reflect our life styles and our tech savviness. Modular phones aren't likely to appeal to this audience any time soon. Apple will always make sure that their top-tier iPhones push the technology bar higher to keep their audience reaching for the best. Modularity based phone just won't cut it with that crowd.

Yet years ago, teaching people what WYSIWYG was, was a slow process and so modular phones will take some time and mental adjustment to catch on. But they'll definitely find a strong market with environmentalists, in emerging markets, geeky do-it-yourself types and even with speciality niche players like photographers who will always want to swap out a camera module for the next greatest lens without having to buy an entire new phone to get it.

And, over time, the individual modules won't look like they're add-on magnets stuck on the backside like they do in our cover graphic example from Google. They'll be refined and flush with the phone's base. Another idea that we found on the project's website is illustrated below. It will simply have the individual replacement components or modules under a removable back cover. It doesn't get simpler than that.

Blurring the Lines: Marketing, Vaporware & Moonshots

Yesterday we were reminded once again by a former Apple executive that worked on the original 2007 iPhone, that Apple's focus was on the smartphone experience rather than the technology behind the phone itself. That's what Steve Jobs had always brought to the table, even extending that philosophy to Pixar movies. Yes, it's about the experience, stupid. And it's now embedded in everything that Crazy Ones of Cupertino invent and deliver.

Google on the other hand has learned the art of creating grand projects that they call Moonshots. The actual number of these projects finding their way to market is of no consequence to Google because it's the myth building that gains them the extraordinary public buzz that they seek in the media. And the media's hunger for stories that they could turn around and sell has no bottom. Winning the rumor mill game is important for all tech companies including Apple.

But in Google's case, their extravagant Moonshots really border on being this generation's version of Vaporware. Google's projects are purposely long-range so that they're able to milk the buzz out of it for months and years and then just let it fade into the sunset without ever actually accomplishing a thing. That's the very definition of vaporware. Microsoft was a master at that, but Google takes that art to a whole new level.

It's quite ingenious when you think about it. I mean, will I even be alive when Google's Planetary Resources actually mines an asteroid successfully? I highly doubt it. But more than likely I'll be hearing about that dream until the very end. But isn't it a cool idea? Yes, of course, it makes for fun conversations over drinks on the weekends with friends. And of course when you're talking about it, you have to say who dreamed it up: Google.

That's not to take anything away from Google who will be, by hook or crook, launching Google Glass into the market in the next year or two. I think I'll even like it for filming hikes and when on a holiday filming my new surroundings. It sure beats carrying a video cam or constantly holding my iPhone up to take a shot. It'll just be naturally on a pair glasses with no effort required. So not everything they're working on is mythical. Many projects will come to market and Project Ara is probably going to be one of them.

Project Ara is an idea that could only come to market with the backing of a company the scale of Google. Google could be willing to stick with it long enough and finance it long enough to see the project through to success.

Apple would do better than Most with the Modular Smartphone

While this concept doesn't easily fit into Apple's business model today, I'm sure that Apple will be carefully following this project's development and/or successes. Having a modular mid-market iPhone would likely fare much better than their current iPhone 5C has in countries like India where Apple is currently struggling with on price. It's why Apple was forced to reintroduce the iPhone 4 into this market to keep them in the game. Yet they wouldn't have to reintroduce aging models if they had a modular hardware platform in place. In fact, a modular smartphone hardware model would be able to reach a larger spectrum of consumers for Apple, from the high low-end through to the mid-level market sectors.

Again, don't look to Apple to follow this model in the short to medium term, but it's one that may work into Apple's longer term planning. Apple could always make high-end profitable components as well as they do with high-end user devices. Apple does very well selling accessories if you're not aware of that fact. So the modular smartphone model is something that a company like Apple could do very well in because they would be able to control the swappable modules after sales market to a large degree.

Yes, I know the argument. Apple doesn't want to make "junk," says Apple's CEO Tim Cook. Yet the modular phone model would be a possible way around that market position. They wouldn't be selling junk. Of course don't expect Apple to ever admit to this being a good idea any time soon, but it does have its merits, even for Apple if the market is to tilt that way over the coming years.

Is this Good for Google or the Entire Android Ecosystem?

At the end of the day, the question becomes: is the modular smartphone a game changer for Google or the entire Android ecosystem? On one hand, it could be a game changer for the larger android players such as Samsung and LG who not only make multiple versions of smartphones but also sell billions of dollars' worth of parts to other Android OEMs.

For the larger players, they'll be able to also sell more parts directly to consumers at higher margins if the modular smartphone concept succeeds. For the smaller struggling OEMs, it could spell their end. I mean, how do you differentiate your smartphone base from another to attract customers if everything else is modularly added by third party suppliers? How do you make money selling a $50 base? Could smaller OEM's really afford to carry a ton of smartphone parts just sitting around the factory floor? I rather doubt it.

On the other hand, Google just missed a bullet to the head with Samsung dropping the debut of their Tizen based smartphones and tablets at the last moment … for now. But let's not kid ourselves. Samsung is the ten ton gorilla that owns the largest market share of Android devices and they could do Google a lot of harm very quickly if they ever decide to pull that trigger next time. And there's likely to be a next time.

So if Google wants to avoid that freight train coming at them at full speed, they may decide to go Apple's route by making the entire widget or simply push their own modular smartphone base for free and make money on selling the parts like the old razor and razor blades game.

In the end, the modular smartphone may very well end up being a game changing product in many market sectors. The real question that we can't answer today is who's going to actually benefit from such a revolutionary shift. Beyond the consumer in certain market sectors, is the design concept a pro Google invention or one that could benefit the entire Android ecosystem? Only time will tell.

In the meantime, you could check out more of the project's details at the MotorolaAra project site and/or check out an article by Times' Harry McCracken that has some nice background material.

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